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Lodging Update September 30th, 2016

By Wm. May
Published: 09/30/16 Topics: Comments: 0

Happy Halloween! Can you believe it's that time of the year.

Although it’s a bit slower in most destinations, we get extra time for deep cleans and maintenance. Plus raking leaves too!

At the same time we visit each property with an extra survey for everything that could or should be done to help owners attract more guests, higher occupancy, and better rates. (We do this every autumn and spring.)

The quality of homes continues to increase. Guests are demanding more, and the best way to help owners succeed is to recommend upgrades and improvements.

They are not always necessary but almost always a good idea.

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More Questions and Answers this month. The kind owners ask - we have answers.

Q: How are sales and lodging taxes handled? We collect and remit all necessary taxes to state authorities who then disburse some locally. They range from 8 to 14.5% so we hope it is all well spent.

Q: What are lodging taxes used for? The funds go to local "Lodging Tax Advisory Committees" who fund advertising intended to bring more visitors to each market.

Q: Are those funds well spent? Some are productive and some are questionable. Frankly, we are not sure those funds derive sufficient benefit, but we collect them anyway of course.

Q: Should owners allow pets? Industry research says that pet friendly homes average 30% more income per year. We think it's lower in some areas, but even higher in beach and lake communities.

Q: Do you charge extra for pets? Indirectly rates can be higher for pet-friendly homes and when multiplied times higher occupancy, owner income grows.

Q: What about pet clean-up? Guests are charged an extra pet cleaning fee per pet per day and seem willing to do so. Some pets require little effort, but cleaning after others can be a chore. The cleaning income in total is intended to cover the clean costs in total.

Q: Do you allow all pets? Actually we are never "pet-friendly' but some homes are "Dog-friendly." No cats, ferrets, pet rats etc.

Q: What about service animals? Federal law demands that animals used to assist with a physical ailment can not be turned-away and often it is not possible charge a pet cleaning fee. Some owners do not like this rule, but it is the law.

Q: How are credit cards handled? Now a days, virtually all payments are by credit or debit cards. If you were not aware banks charge about 3% of all charges (rent, cleaning, taxes, etc.) so we collect a reservation fee of that amount from the guests. Then remit it to the credit card companies.

Q: Do you limit occupancy? All homes are listed as (i) a "Normal" occupancy and rate (ii) a "Sleeps" occupancy and (iii) a "Maximum" occupancy which is usually just one or two people more than Sleeps.

Q. Why allow a few more? This answers the constant question about charging for children who will "Sleep on the floor." Using any other system just encourages guests to sneak in an extra person or two.

Q: Why are guests charged for extra person cleaning fee? So called per-person-pricing has become common in the lodging industry. This allows a slightly lower rate to smaller groups and higher to larger parties. Because there is more cleaning, a portion goes to the cleaners and the rest is accrued to the owner as rent.

Q: Why do rates differ during the year? We use a proprietary S2D2 system that adjust rates based on season, strategy, distribution and dynamics. Weekends are more expensive than mid-week. Summer is higher, Holidays are higher. But very slow seasons are much lower.

Q: How do you keep track of all the rates? We use our own system, some third-party algorithms plus our own kind of personal algorithm to get in the ballpark and then adjust them sometimes every day.

The market determines prices but we must know the market and respond.

Note: So called Dynamic pricing is very complicated and becoming more so. Rest assured our engineers and staff are leaders in this field that creates more bookings and income for owners.

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Profile - Jonathan McIntyre was an early principle in our business and we have enticed him to rejoin us and oversee our main office operations as well as creative services that includes websites, photography, graphics and more. As a former youth minister, Jon has the patience of a saint. Many of you have spoken to him and others will appreciate his wonderful humor and selfless service.

Jonathan helped us become the best management firm around and is now helping us race far beyond the competition yet again. We are so glad he is back. Jon and his wife Lisa are the beaming parents of two young daughters - Miracle and Harvest.

Author: Wm. May, Vortex Managers
Blog #: 0539 – 09/30/16
Sponsor: Vortex Organization – We train quality people to help run unique Inns, Resorts and Vacation Rental Management companies, in an industry that has been a webby net of technology combined with good old fashioned property, guest and owner services. – VortexManagers.com

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